Stagecoach gets more leeway from banks as economy comes out of lockdown
Stagecoach Group PLC (LON:SGC), the bus operator, said it has renegotiated its bank covenants to cope with the disruption to travel caused by the coronavirus (COVID-19) lockdown impact.
The transport group said its lenders have agreed to a covenant waiver for the periods ending October 31, 2020, and May 1, 2021, on its loan facilities that end in 2025.
As an alternative to the covenants, Stagecoach said it has agreed to minimum liquidity thresholds as at October 31, 2020, and at May 1, 2021.
Current liquidity including available cash and undrawn, committed bank facilities was over £800mln, it added.
Bus services have continued to run during the pandemic but with very few passengers and Stagecoach has cancelled its dividend and cut costs to compensate for the loss of revenue.
The UK government has allocated emergency funding of £254mln for buses and £29mln for trams and light rail.
Stagecoach has also received £300mln from the Bank of England’s COVID-19 Corporate Financing Facility.